Makes sense that their healthcare would have gone down, because member countries only tap into that resource when they're financially in the red. When you're not making your budget, most people, including governments, aren't thinking about health insurance. That's what those stats mean. That's all that means. They were financially in the red, they stopped paying for healthcare, but they did receive aide from IMF.

Not true, Martin. The Yale researchers factored all of that into their study. What they found is--a positive correlation between IMF countries and TB because the IMF forced countries to cut back on their health budgets as part of the program. That's what the article says.

Just gets back to what I've been saying about the Body of Christ's responsibility to take over and start running these things, and to be the ones that are funding all of the countries of the world when they're in these tight spots. Isaiah 61:6 says that we're supposed to be boasting ourselves in the riches of the nations.

Oh good. Then you can tell us all about the IMF and Argentina and Brazil and save me a lot of trouble and effort.

Awesome,. here we go.

The IMF membership is voluntary, so it still goes back to the countries government finding it appealing to their own sake to be a member.

Health care is not seen as an economic issue since it is usually based on that a country is courrently producing so any aid must be seen with in a range of return projections.

I am NOT defending the IMF I am pointing out that the problem stems on a different level.There is division in the united states over humanitarian aid to a country simply because once we release funds then the control we have over how it gets distributed.

Then there are those that do not want our military presence in a country because of various reasons. People want to help, many americans do not like 3rd world starvation, economic depression in another country.

But, there is only so much we can do. We hear that the citizens should rise up and take their own nations back. Yet, look at the nature in which they try to do that, Rwanda is a great example of a country who's rebels apart from the government did not move to over throw the government for the sake of the people, they slaughtered a weaker sect.

So then as our politically correct systen wants us to stay out of other countries affairs, why is it a surprise that the IMF now has its fingers in those countries that need to be educated that they are enslaved by two fronts. they are enslaved by the government who cannot control the rebels, and the rebels see that they have to gain numbers by enslaving a weaker sect of the country.

It's not pretty and if america actually has any responsibility to solving these physical problems, what the critics will have to come to terms with is that no reform, even the changes you want in our own country, if they are that important to you, will not come about with out bloodshed.

If we want the IMF out of the way then we will have to find a way to boost the economics of a country and eliminate the parasites there waiting to take ever dollar away from where it is supposed to go.

Yeah, well, they're not the only ones that are ideologues. I haven't submitted my resume for that 'cause finance isn't my gifting. If I'd been President of the United States, instead of doing what Obama's been doing for the last year as Senator/President, I'd of personally just given everybody in the U.S. about a hundred thousand dollars [tax free] and made it the vote of the people as far as whether or not the auto industry made it or whether people paid for a college education, got rid of debt, paid down their house, went nuts on a luxury vacation or new furniture, got badly needed healthcare, got badly needed medical insurance, etc. That's around 30 trillion dollars. More than Obama will probably ever spend, but at the same time, the economy would have gone nuts with that and any risks of inflation or deflation from doing that would have likely been minimal 'cause few folks were going to put that entire amount into their 401(K) and then convert their 401(K) into a rollover IRA. Small business owners would have likely pumped at least half of that into being a little bolder with doing what they need to do, and the following three to six years would have likely gotten everything back in tax dollars or more 'cause of the number of people that would have done something to have made more money with that. Makes more sense to me to do it that way. That's why I'm not President. That, and I'm not old enough yet.

Just gets back to what I've been saying about the Body of Christ's responsibility to take over and start running these things, and to be the ones that are funding all of the countries of the world when they're in these tight spots. Isaiah 61:6 says that we're supposed to be boasting ourselves in the riches of the nations.

Martin, care to lay out a plan, then?

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"I knelt to drink,And knew that I was on the brinkOf endless joy. And everywhereI turned I saw a wonder there."

If I speak in the tongues of men and of angels, but have not love, I am a noisy gong or a clanging cymbal. And if I have prophetic powers, and understand all mysteries and all knowledge, and if I have all faith, so as to remove mountains, but have not love, I am nothing. If I give away all I have, and if I deliver up my body to be burned, but have not love, I gain nothing.

I've been saying the same thing Martin. If everyone had been given that money, a lot of people could have paid off their mortgages, thus freeing up more finances to spend elsewhere and I think the economy would have been stimulated by that, NOT by giving the money to the greedy jerks who got us into this mess in the first place. Blessings....

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"I would rather train twenty men to pray, than a thousand to preach; A minister's highest mission ought to be to teach his people to pray." -H. MacGregor

I've been saying the same thing Martin. If everyone had been given that money, a lot of people could have paid off their mortgages, thus freeing up more finances to spend elsewhere and I think the economy would have been stimulated by that, NOT by giving the money to the greedy jerks who got us into this mess in the first place. Blessings....

Give the money to the people but force them to spend it 100% on the mortgage.Then the people would be out of debt and the banks would also have their money.That way both would have gotten some benefit from the bailout.

Now the banks have the money and can cash in the mortages.

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1 Timothy 2:3-4 ...God our Savior; Who will have all men to be saved...John 12:47 And if any man hear my words, and believe not, I judge him not: for I came not to judge the world, but to save the world.Romans 4:5 But to the one who does not work, but believes in the one who declares the ungodly righteous ...

I think the problem is that Christians have been taught to be passive and reactive. They respond to a crisis with whatever help they can muster.

Whereas, satan's minions are pro-active. They have a plan for world domination. And, they plod away at it year by year until the day when--oops--we just trip and fall into a new world order. Their job is to set things up so that people will beg for whatever nonsense they have engineered us to beg for.

I've been saying the same thing Martin. If everyone had been given that money, a lot of people could have paid off their mortgages, thus freeing up more finances to spend elsewhere and I think the economy would have been stimulated by that, NOT by giving the money to the greedy jerks who got us into this mess in the first place. Blessings....

Give the money to the people but force them to spend it 100% on the mortgage.Then the people would be out of debt and the banks would also have their money.That way both would have gotten some benefit from the bailout.

Now the banks have the money and can cash in the mortages.

um...they don't want the people out ofdebt. Ever consider that? Nor do they want people owning private property. The middle class is the biggest threat to world domination that exists, aside from our Constitution.

Surely I've concidered that. They want more debt. The bigger the debt the more they own.Your constitution is a zero threat. It gets bypassed is all kind of ways. Some live under the law. Some above...

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1 Timothy 2:3-4 ...God our Savior; Who will have all men to be saved...John 12:47 And if any man hear my words, and believe not, I judge him not: for I came not to judge the world, but to save the world.Romans 4:5 But to the one who does not work, but believes in the one who declares the ungodly righteous ...

I think the problem is that Christians have been taught to be passive and reactive. They respond to a crisis with whatever help they can muster.

Actually it is Satans minions that are spreading Christianity around.

Christianity is all about "believing" enough and thats enough. Christian theology takes the aspect of teaching that a spirit filled walk is to see a "physical" problem on earth and pray about it. They teach to stay out of the world, but if your going to go into the world, then pray.

So what happens? Really what happens is young energetic evangelical Christian get into politics to "make a difference" he goes in with all the spirit filled teachings of Christianity and its all hogwash since when he gets into the game young energetic evangelical Christian then realizes that his bible reading and prayer did not actually equip him to solve a problem so he gets swallowed alive.

Maybe when Christians will wake up and realize that solving real physical problems means you get down and dirty and you might get cut and you might cut someone else.

If Christians believe it is their job to fix america and the world in the consideration of what they all are afraid of then check your passivism at the door and get busy and quit whining and crying about it.

I've been saying the same thing Martin. If everyone had been given that money, a lot of people could have paid off their mortgages, thus freeing up more finances to spend elsewhere and I think the economy would have been stimulated by that, NOT by giving the money to the greedy jerks who got us into this mess in the first place. Blessings....

Give the money to the people but force them to spend it 100% on the mortgage.Then the people would be out of debt and the banks would also have their money.That way both would have gotten some benefit from the bailout.

Now the banks have the money and can cash in the mortages.

Exactly. As I see it, that would have benefited both parties, and the economy, all in one fell swoop. As they did it, only the banks benefited, as usual they were rewarded for evil. Blessings....

Logged

"I would rather train twenty men to pray, than a thousand to preach; A minister's highest mission ought to be to teach his people to pray." -H. MacGregor

Seriously.. what are you proposing, specifically?Or am I just not understanding what you are saying?

Logged

"I knelt to drink,And knew that I was on the brinkOf endless joy. And everywhereI turned I saw a wonder there."

If I speak in the tongues of men and of angels, but have not love, I am a noisy gong or a clanging cymbal. And if I have prophetic powers, and understand all mysteries and all knowledge, and if I have all faith, so as to remove mountains, but have not love, I am nothing. If I give away all I have, and if I deliver up my body to be burned, but have not love, I gain nothing.

The Baseline ScenarioWhat happened to the global economy and what we can do about it

What the IMF Would Tell the United States, If It Could

From 1945 until around 1980, the financial sector was one industry among many in the United States. Then something happened.

People in finance started making more money, jobs in finance became more desirable, financial institutions became more influential, and the linkages between the financial sector and the political establishment became stronger. At the same time that our financial sector became more leveraged and more risky, it also became more powerful. The result was a confluence of interests between Wall Street and Washington - one more normally found behind the scenes of emerging market crises, the kind the IMF is called on to resolve.

Simon and I tell this story - and the story of what happened next - in "The Quiet Coup," an article in the May issue of The Atlantic. (Many thanks to The Atlantic for putting the online copy up as early as they did.) The working title of the article was, "What the IMF Would Tell the United States, If It Could." Enjoy.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF's staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we're running out of time.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government

"laid bare" is very negative no matter how you look at it.a] It laid bare to the sleeping public. That means the ones in charge just ignored the problem. Or even worse profitted from it. b] The ones in charge didn't knew about it. That mean they lack essential insight to run a country.

In both cases the leadership is unable and/or unwilling to change things for the better. Its impossible to pay of debt if the debt is higher than total amount of money. Every dollar printed is more debt because .gov has to pay a percentage on every printed dollar. (percentage on top of the value that is)

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1 Timothy 2:3-4 ...God our Savior; Who will have all men to be saved...John 12:47 And if any man hear my words, and believe not, I judge him not: for I came not to judge the world, but to save the world.Romans 4:5 But to the one who does not work, but believes in the one who declares the ungodly righteous ...

martincisneros

Actually, we're going to enter into unprecidented prosperity. Won't look good at first as gold prices hit $1600US to $1700US per ounce or in that ballpark 'cause it'll actually look like the US dollar is basically cigarette rolling paper, but prosperity is coming by other means. Way toooo many believers have sown for prosperity over too many years and haven't been weary in well doing and for them it's going to start coming to them as easily as their breath comes to them. For others that knew to, but bailed on that revelation, "ah well..."

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Paul Hazelwood

Actually, we're going to enter into unprecidented prosperity. Won't look good at first as gold prices hit $1600US to $1700US per ounce or in that ballpark 'cause it'll actually look like the US dollar is basically cigarette rolling paper, but prosperity is coming by other means. Way toooo many believers have sown for prosperity over too many years and haven't been weary in well doing and for them it's going to start coming to them as easily as their breath comes to them. For others that knew to, but bailed on that revelation, "ah well..."

I already see people working on many of these solutions, people actively coming up with ideas. The car manufacturers are trying to do things differently and do things to spur growth. One thing they are doing is that if you buy a new car, and you get laid off from work they will cover your payments for up to a year.

When I talk about solutions, those are solutions that matter. I can look at the world and I can find all the evil I can handle. I can scoop it up and seal it up in a jar and carry it around with me and I can show that evil to everyone I see and make the case for this impending judgement or crisis. All this evil and bad that I have stored up in my jar can all be true, 100% of it can be true and I can glimmer in going out and finding it all.

Or.....

I can look around and see that evil, I can scoop it up and place it in my jar, then when that jar gets full I can seal it up tight. Then I can get an even bigger jar, and I can look at the world and find the good. I can also toss in my ideas in this new jar , and in fact, I'll throw in my jar of evil in there too, just as a reminder of why I am seeking the good. Pretty soon, ideas, concepts, solutions, things people are actually doing fill the new jar up and just to keep my basis in reality, I sift through the jar of good to check on my jar of evil and realize that somehow, as tight as I sealed it up, that jar isn't as full as it once was.

Throughout the early and mid-nineties, the International Monetary Fund (IMF), World Bank, the Inter-American Development Bank, and the G-7 countries, all praised Argentina's liberalization program as an economic model for the Third World. Then President Carlos Menem and Economic Minister Domingo Cavallo promised the Argentine people that they would soon become part of the "First World."

Today, Argentina is in total disintegration. Not only is the economy in its fifth year of recession/depression, but its banking system has collapsed, the unemployment rate has skyrocketed, and over half the population lives below the poverty line.

No country in contemporary Latin American history has fallen swifter and further into mass poverty and experienced as prolonged an economic collapse as Argentina. Though most Latin American countries have applied neoliberal policies, none has been as thorough and rapid as Argentina. Moreover, no Latin American country was as industrially advanced or had as diversified an economy. Finally,Argentina had the highest standard of living in the region, the most qualified and skilled labor force, and the political leadership most determined to follow the precepts of the International Financial Institutions (IFls) and the G-7.

Argentina is a test case for the efficacy or failures of the neoliberal approach under optimal conditions: a willing government, a well-developed infrastructure, a skilled labor force, long-term links to world markets, and a significant middle class with Euro-American patterns of culture and consumption.

The number of Argentines below the poverty line has grown geometrically: Ten years ago there were less than 15%, two years ago it was 30%. In June 2002 the percentage exceeded 50%. In that month, Eduardo Duhalde's regime acknowledged 18.2 million people (51%) below the poverty line. Of these, 7.8 million are indigents according to SIEMPRO (Spanish acronym for System of Information, Monitoring and Evaluation of Social Programs), an official institution under the jurisdiction of the President. Children and adolescents living in poverty number almost 8.2 million. Between January and May 2002, the number of poor grew by 3.8 million, or 762,000 a month, or 25,000 a day. The rate of indigence is growing even faster. In 1998, 29% of the poor were indigent; in June 2002, 43%. The massification of extreme poverty is manifested in the high rates of child malnutrition-over 58% in Matanzas, a working-class suburb of Buenos Aires. In the interior there are numerous reports of children fainting in school for lack of food, and over 60% of newborns in Misiones suffer from anemia-a direct result of government cutbacks to meet G-7 and IMF demands.

INTO THE ABYSSApart from the top 10% of the population, all working sectors and pensioners have experienced an average 67% income decline. In 1997, the United Nations Development Program (UNDP) calculated per capita annual income at $8,950. In March 2002 it was $3,197. The decline affects all regions of the country. If we use as rough indicators of "class" the different regions of the province of Buenos Aires, we can approximate the social impact of the crisis. The income in the capital city of Buenos Aires, which we can take as largely middle class, saw the average fall from $909 a month in December 2001 to $363 in March 2002; in the working-class suburbs (conurbano) of the city of Buenos Aires income fell from $506 to $202; in the province of Buenos Aires, from $626 to $250. The largest decline is among workers in the informal sector (work without benefits or employment protections) and among pensioners. In the capital, income of the "informals" dropped from $643 to $257; in the working class suburbs from $334 to $134; in the province from $394 to $158. Among pensioners the decline was from $437 to $175 in the capital; from $320 to $128 in the working-class suburbs and from $360 to $144 in the province. The situation is far worse in the other provinces, where pay scales are lower, unemployment is higher, and where there are frequently three to six month delays in payment of salaries and pensions.

For the working and middle classes, the loss of formal employment means a sharp decline in income. Employed wage earners in the private sector of the capital earned $904 in December 2001. Those who were forced into under-employment were earning $257 in the informal sector three months later. A 30% rise in prices during the same period accompanied the skyrocketing loss of jobs.

Those whose main income is a pension are indigent in all geographical sectors, as are all unemployed workers (30% of the labor force) living in the suburbs and greater Buenos Aires. Even if we assume that some workers classified as unemployed are actually working in the informal sector, almost all are near or below the line of indigence. The massive growth of unemployment to 30% nationally, from 40 60% in the working-class suburbs, and even higher in some of the former one-industry towns of the interior, is reminiscent of the worst years of the U.S. depression of the 1930s and of Weimar Germany in the 1920s.

Accompanying and interrelated to the impoverishment of the mass of the middle and working classes is the concentration of wealth in the ruling and upper middle classes and foreign capitalists and bankers. In 1974 the top 10% received 28% of national income, in 1992 slightly over 34% and in 2001 over 37%, while the poorest 10% received 2.2% in both 1974 and 1992 and 1.3% in 2001- before the devaluation and sharp increase of unemployment.

Together the upper classes-the ruling elite plus the upper middle class-receive 53% of declared income. Because the upper classes were able to withdraw their funds (estimates run as high as $40 billion) from the banks and send their money outside the country, avoiding the confiscation of December 2001, the percentage of wealth in the hands of the upper classes is probably close to 80%.

In that confiscation, the government froze all bank accounts, and subsequently converted them to pesos. The conversion rate in June 2002 was 3.5 pesos to the dollar. In effect, the accounts were reduced from $45 billion to approximately $13 billion and declining. The regime's attempt to convert the remainder into state bonds redeemable in ten years at 2% interest would devalue these personal savings accounts even further, given the 30% rate of inflation for the first quarter of 2002. This attempt by the regime to swindle the account holders out of their savings was prevented by massive demonstrations by the impoverished middle class-the potbanging cacerolazos-which threatened the Congress and stormed the banks.

MACROECONOMIC INDICATORSDuring the first three months of 2002, industrial activity declined by over 18%. Textiles and manufacturing were down 48% over the previous year. The number of plant closures accelerated throughout the 1999-2002 period, reaching unprecedented levels in the last trimester of 2001 and the first half of 2002. Unused industrial capacity was running at more than 50% in most sectors of the economy, including metal, textiles and auto parts.

Between 1990 and 1998, the foreign debt grew from $58 billion to $140 billion. Over the same period the cumulative sum of capital flight plus interest payments rose from $75 billion to $197 billion. In other words, external borrowing largely financed capital flight and part of the mushrooming debt payments, leaving a net deficit in capital flow. This eroded the economy's capacity to sustain growth and subsequently led to the recession, further budget cuts, and later turned the recession into a depression. The foreign and domestic elites' massive withdrawal of funds-aided and abetted by the foreign banks led to the confiscation of savings of millions of Argentines and the virtual collapse of the financial system. Throughout 1999-2001, IMF loans merely served to pay back private banks and the IFls, while exacerbating the debt problem, deepening the recession, and lowering living standards. In order to get short-term loans, Argentina was paying 16% over U.S. Treasury notes as late as August 2001. Once the fall took place, neither the IFls nor the G-7 were willing to lend new money, unless the central government repealed its Economic Subversive Law (a law designed to prosecute illicit banking practices), abolished the provincial currencies which kept the local economies afloat, and fired several hundreds of thousands of health, educational and other public employees.The key concern of the IFls with repealing the Economic Subversive Law was that it was an instrument to prosecute G-7 banks that were involved in the illegal transfer of over $50 billion in the year 2001-02. In June 2002, under IMF pressure, the law was repealed. While the IMF blamed the Argentine "savers" for the financial crisis-by making panic withdrawals-substantial data demonstrate that the private, principally foreign-owned banks had already consummated a massive transfer of funds out of the country and were not willing to re-capitalize the banks. Furthermore, the IMF and World Bank pressured the Argentine government to assume the private banks' obligations to their depositors and issue ten-year state-guaranteed bonds in lieu of direct payments to holders of savings accounts. Lacking funds and facing total unwillingness of foreign bank corporations to recapitalize their Argentine subsidiaries, the foreign and national private banks claimed to be on the verge of bankruptcy, at exactly the moment that the rightful claimants attempted to withdraw their savings.

The immediate cause for the collapse of Argentine capitalism was the role of the foreign-owned banks and the IFls, led by the IMF, in emptying the Argentine financial system. The longer-term reasons are rooted in regressive structural changes including privatization, Structural Adjustment Programs (SAPs), open markets, and quasi-criminal "deregulation" of the economy. All these led to the collapse of domestic production, wholesale pillage of the economy, and the confiscation of millions of saving accounts.

In the months leading up to the crisis, the ten leading banks moved approximately $27 billion out of the Argentine financial system. This system operated on two levels: a formal system of deposits and loans and an "informal sector" where mega-accounts operated, largely to launder funds and carry out speculative activity in the financial sector. The "other" categories in February 2001 amounted to $57 billion in assets and $60 billion in obligations. By November the totals of "others" declined to $25 billion for assets and $35 billion in obligations. A closer analysis reveals that of the $25 billion decline in assets, over 74% of it took place among the ten biggest banks. The IMF loans to Argentina served to cover the growing drain of resources out of the financial system by the financial elites, while imposing harsher cuts in public spending and investment. The triple phenomena of deepening economic depression, financial flight, and growing indebtedness were caused by the alliance of the IFls, the foreign and local big financiers, and the foreign-owned banks. The small and medium Argentine depositors were victims of a covert financial swindle, and not the perpetrators, as the apologists charged. Their desperate and belated effort to withdraw their savings was a reaction to the financial swindle executed by the financial elite. Most small and medium savers, however, were not successful. Bank liabilities after the flight of big accounts and the drying up of overseas credits far exceeded their assets; with the economic crisis, many of their outstanding loans were delinquent and there was no way that headquarters would inject new funds to cover the demands of depositors. The government intervened to "save the banks" by freezing all deposits and preventing depositors from recovering any of their savings. The gross class character of the government's financial rescue plan infuriated the dispossessed middle and lower classes. The subsequent devaluation of the peso in effect robbed them of two-thirds the face value of their frozen savings and depressed their incomes, while the upper middle and ruling classes who got their money out of the financial system were able to lower their cost of living, production and consumption by a commensurate 65%.

PUBLIC FIRESALEThe Menem regime gave the appearance of an "affluent regime" thanks to heavy borrowing and windfall income from the selloff of public properties. Most of the inflows of capital raised upper class consumption and facilitated wholesale corruption by the entire political class and their entourages of public officials, judges, customs officers, police, and military officials. Foreign bankers were willing to lend because the interest rates were 10 to 20 points above the Euro-U.S. rates and there was easy liquidity given free convertibility, and the de facto dollarization of the economy ensured monetary stability. Thus, each step of the liberalization process weakened the fundamentals of the economy: The domestic economy shrank, entrepreneurs fled into apparently lucrative financial-speculative activity, debt payments skyrocketed, the loans-for-privatization deals were approaching their limits, and external flight of capital accelerated as the upper classes sensed that the whole liberal edifice would eventually collapse, leaving neither a productive system nor monetary resources to revive it.

Crucial to the collapse of the bubble economy was the behavior of the Argentine big bourgeoisie. Powerfully ensconced in the Menem regime, they were the initialbeneficiaries of the privatization process and the loans from overseas lenders. They were also the group that dictated economic policy. The Menem regime's point of reference for developing the liberal agenda was, first and foremost, the dominant classes in Argentina who had investments overseas, were tightly linked to overseas banks via joint investments in privatized banks and via foreign loans, and who demanded a peso easily convertible into dollar equivalence. Liberalization to the maximum allowed this 'transnational' Argentine bourgeoisie to buy public banks and enterprises on the cheap and sell them to foreign capital. Deregulation of the banks allowed massive transfers of funds out of the country and the laundering of illicit gains. Cheap imports, easy loans and fast exits of funds were the Argentine elite's definition of liberalization.

For obvious reasons the G-7 countries and the IFls were wildly enthusiastic: They gained control over banks and deposits, lucrative telecommunications, airlines, oil and other money-earning public enterprises. They encouraged the regime to proceed full speed ahead with reckless abandon.

As the domestic economy, particularly in the provinces, collapsed, the provincial governments ran up huge debts-partly to finance corrupt political machines to sustain the national government, and partly to avoid provincial popular revolts. Unlike South Korea, China, and Japan, large-scale corruption did not grease the wheels of national production: Bribes greased the hands that sold off lucrative public enterprises to foreign investors who stripped assets and reduced local production in favor of large-scale speculative activity. There was an inverse relation: As corruption grew, industry declined, tax receipts were negligible and competitiveness became an empty slogan.

Meanwhile, foreign investors moved in on the agro-industrial sectors, retail trade (mega malls), real estate and hotels, in association with a small nucleus of the Argentine economic elite and sectors of the kleptocratic political class, headed by the extended Menem family and its political entourage.The first major adverse effect was the slashing of employees in the process of preparing public enterprises for privatization. The state fired hundreds of thousands of workers in the telephone, railroad, and waterworks sectors, assuming the economic costs and taking responsibility for repressing the ensuing protests. Many cities in the interior, like the petroleum city of Neuquen, were turned from prosperous cities to ghost towns, with 30-40% unemployment rates. Promises of "alternative employment" were never kept, as provincial and local officials linked to the central government either stole the funds outright or used them to finance their political machines, through expansion of unproductive "administrative" jobs.

The "centralization" of legislative and executive powers in the presidency-in his very person-and the dictatorial methods Menem used to legislate (most industries and banks were privatized via presidential decrees) facilitated rapid and extensive liberalization.

DISINTEGRATION & DESTITUTIONU.S. Secretary of the Treasury Paul O'Neill weighed in on the side of the IMF's "final squeeze," endorsing the IMF bailout of the bankers and the takeover of the remaining sectors of the economy. But he demanded, in typical euphemistic language, "a political solution." He called for a strong authoritarian regime capable of ramming the mass job firings, budget cuts and abolition of local currencies policy down the throats of the impoverished Argentines. O'Neill questioned "the leadership capacity" of the Duhalde government. According to an interview, O'Neill said Argentina's problem boiled down to a single question: Will the Argentine government do what it has to do, namely, implement the IMF policies? What O'Neill and others in the IFls and G7 mean by "political will" is precisely to override the interests and survival of thirty-three million Argentines, elected congressional officials, governors, and mayors, and force upon them further bankruptcies and unemployment-to push beyond the 53% poverty level to satisfy overseas bankers and investors.Probably the most obscene remarks came from Anne Krueger, second in command at the IMF, a U.S. appointee and a former Stanford professor. In an interview in the Financial Times, she claimed that "the Argentine authorities are not sufficiently realistic as they should be." Realism, according to Krueger, means that in the midst of a depression, cut public spending, lower living standards and increase unemployment. The "realism" referred to is the world of finance capital and its voracious appetite to squeeze even more interest payments from bankrupt provinces, businesses and public treasuries; to withdraw more savings from Argentina with impunity.

Following a string of recent corruption allegations, the administration of President Néstor Kirchner is being hit with a new brouhaha surrounding his economy minister, Felisa Miceli. The case could damage Mr Kirchner's image by adding to a growing perception that corruption runs deep in his government. Ms Miceli may ultimately be sacrificed. However, the incident will have little if any effect on economic policy, which is largely run directly by the president and his inner circle. Nor is it likely to undermine his wife's prospects in the October 28th presidential elections.

Accusations of irregularities and payoffs, particularly in public-works and other government contracts, have been made since 2005, but only in recent months have they been accompanied by evidence. The case of a large natural-gas pipeline project, which surfaced in March, may involve as much as US$25m in illegal payments to government officials, according to opposition politicians and a judge. At least one foreign company, Sweden's Skanska, has been implicated.